The Case for Transforming Project Management
In the 2nd episode of the 4PM Podcast, we will present the case for the transformation of project management and why it is becoming critical for future project management!
In this article, we will examine four key areas that demonstrate why transformation of project management practices is critical:
Absence of project success standard
The high rate of project failure
The root causes of project challenges
The case for transformation
The Uruk PM mission is:
Through integrating people, processes, and technology, we aim to transform how organizations manage projects while leading the way to making project management indispensable for organizational success!
So, the critical question is, why do we need to transform project management? Is this a new fad or trend of the month?
The Need to Transform Project Management
Project management has been around for decades, with professional associations, certifications, standards, and plenty of literature available. However, project success rates remain low across industries, with some sources estimating that nearly 70% of projects fail to meet goals. This points to an urgent need for transformation in Project Management.
Absence of Project Success Standard
A significant roadblock in improving project outcomes is the lack of a consistent definition or standard for measuring project success. When we ask how organizations measure success, a typical response is “asking the client for feedback.” However, with multiple stakeholders involved in most projects, relying on subjective opinions makes benchmarking difficult.
Additionally, there is rarely a distinction between project management success and product success or objectives success. Meeting budget and schedule targets indicates project management’s effectiveness, but it doesn’t guarantee the achievement of business or stakeholder goals.
The ambiguity in project success discussions stems from a lack of a well-defined standard for success across industries. The ‘four dimensions of project success’ concept provides a comprehensive framework for comprehending and measuring project success. Establishing a reliable, industry-specific standard is critical for practical project evaluation and improvement, as it eliminates subjective assessments.
Without clearly defined success criteria tied back to initial project outcomes and benefits, we cannot gain an accurate picture of current performance or where opportunities for improvement exist.
The High Rate of Project Failure
While cited project failure rates depend significantly on the source and definition used, most experts agree that many projects struggle to meet expectations. According to research by organizations like Independent Project Analysis (IPA) and Oxford University, projects across sectors like construction, infrastructure, IT, and product development commonly battle cost/budget overruns, delays, quality issues, or failure to deliver expected benefits to the business.
For large “megaprojects,” a study of more than 300 projects shows success rates as low as 35%, with average budgets of US$3.2 billion, indicating billions lost in waste. Beyond direct financial impacts, failed initiatives can also carry career, reputational, and opportunity costs for companies and staff. The failure level is a systemic issue across project management rather than isolated cases, regardless of precise statistics.
Project failure rates result from systemic issues like inadequate planning, poor risk management, and insufficient stakeholder engagement. The problems require a strategic shift in project management, emphasizing agile methodologies, enhanced communication, and continuous learning from previous projects. This requires a comprehensive approach and commitment to constantly improving project management practices.
What are the Root Causes of Project Challenges
Behind these project difficulties lie multiple contributing factors, but a couple root causes stand out as catalysts that allow problems to emerge, including:
Lack of executives buy-in
Without an understanding and appreciation among leadership teams for the strategic value competent project management brings, it will never gain appropriate priority and resourcing.
Absence of effective project management systems and processes
Many organizations lack structured frameworks, policies, and processes for managing projects consistently and effectively. Combined with the first cause, lack of executive support, projects end up operating independently in silos without adequate governance, standards or shared best practices.
Symptom vs. Root Cause
Identifying symptoms and root causes of project failures is crucial, as communication breakdowns or resource issues can indicate more profound issues like inadequate systems.
Ineffective Project Management Practices
Organizations with outdated or bureaucratic project management systems often neglect or bypass projects, leading to ineffective practices and reluctance from executives to invest in project management.
Despite having formal project management manuals, a global company found divergent project execution approaches among their teams, indicating a lack of adherence to existing systems and highlighting the need for more dynamic and practical frameworks.
Transformation in Project Management
Turning project management into a critical driver of organizational success requires attacking those root causes through strategic realignment and operational transformation.
The project management community must effectively showcase why PM should be considered a formal enterprise capability alongside Finance, HR, and IT departments. Structurally, this likely involves moving from informal PMOs to dedicated Project Management Departments with executive-level leadership.
Further, transforming project delivery requires refocusing priorities on value realization over meeting task milestones. Methodologies must encompass the entire product lifecycle with embedded governance mechanisms to ensure alignment with business priorities. Technology also provides robust PM information systems to enforce consistency, collect data, and feed continuous improvement.
The PM transformation aims to redefine project success as tangible value delivered to stakeholders across industries by shifting focus from traditional project execution methods. Consequently, the UrukPM principle of ‘Integration to Deliver Value’ becomes central. It emphasizes aligning project management practices with an organization’s strategic goals because it facilitates a more integrated and holistic approach to managing projects. It advocates for robust, long-term Organizational Project Management (OPM) systems and adaptive methodologies.
This is crucial because it transforms project management from a mere operational task into a critical strategic function, underscoring its importance in achieving broader organizational objectives.
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Project failure rates remain unacceptably high, thereby necessitating a critical transformation. The case for change compellingly addresses root issues, subsequently calling for strategic realignment and an operational overhaul. Consequently, active change leadership becomes vital for overcoming inertia, securing stakeholder buy-in, and allocating necessary resources. Furthermore, organizations must shift their perspective from merely operational to a more strategic view of project execution, which justifies significant investment.
Given the increasing complexities in business, there is an opportunity for enhanced productivity and improved financial performance. Therefore, the time to address this industry-wide problem is emphatically now.